Dadha Pharma LLP Vs DCIT (Madras High Court)
The Madras High Court recently addressed a divergence of opinion among its single judges regarding the mandatory authority for issuing assessment notices under the faceless assessment scheme. The case, Dadha Pharma LLP Vs DCIT, involved a dispute over whether the Jurisdictional Assessing Officer (JAO) or the Faceless Assessment Officer (FAO) must issue such notices.
One learned Single Judge had previously held on December 20, 2024, that notice issuance by the JAO was permissible and not mandatory for the FAO. However, another Single Judge, in an order dated April 21, 2025, sided with the view expressed by the Bombay High Court in Hexaware Technologies Ltd vs. Assistant Commissioner of Income Tax. This latter view stipulated that it is mandatory for the FAO to issue notices, rendering those issued by the JAO invalid.
Given these conflicting interpretations, the matter was referred to a Division Bench. The Division Bench, led by the Chief Justice, affirmed the position taken in Hexaware Technologies Ltd, which had also been followed by other Bombay High Court judgments such as BMC Software India (P) Ltd vs. Deputy Commissioner of Income Tax and Kairos Properties (P) Ltd vs. Assistant CIT.
The court clarified that while Special Leave Petitions against the judgments in BMC Software India (P) Ltd, Hexaware Technologies Ltd, and Kairos Properties (P) Ltd are pending before the Supreme Court, there is currently no stay on these rulings. Consequently, the Madras High Court held that the law as laid down in Hexaware Technologies Ltd prevails.
